Opportunistic politicians and fiscal outcomes: the curious case of Vorarlberg

Using a unique set of electoral rules present in the Austrian state of Vorarlberg, we explore the question whether direct election of the mayor affects the size of local governments. Using difference-in-differences estimation and propensity score matching, we find evidence that direct elections of the mayor are associated with lower expenditure on public administration and public personnel, however compensated by higher expenditure in the visible categories of spending i.e. transportation, social protection and promotion of the economy